The Mechanism of M&A Under the Impact of Local Government Competition: Models and Empirical Studies

Fengrong Wang ()
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Fengrong Wang: Shandong University

Chapter Chapter 4 in M&A and Corporate Consolidation, 2021, pp 175-254 from Springer

Abstract: Abstract M&A behavior is essentially a game centered on pricing and M&A strategy. In this chapter, we will first construct a game theoretic model of M&A incorporating government behavior using the cooperative game method based on the Cournot model. We will study the market structure when the market reaches the expectation equilibrium with the model and further constructs an endogenous SOE M&A model incorporating the local government competition to explain the impact mechanism of local government behaviors on local SOE M&A. And, on this basis, an exogenous M&A model under the competition paradigm of local governments is built up, which uses empirical measurement methods to quantitatively identify and test the factors affecting M&A from the perspectives of tax competition, expenditure competition and regulation competition. Our emphasis will be on the influence mechanism of government behaviors on M&A.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-15-6675-2_4

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DOI: 10.1007/978-981-15-6675-2_4

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